TRS Illinois Retirement Payout Options Explained — Standard, Reversionary, and More

Four Options, One Irrevocable Choice

When you submit your TRS retirement application, you'll choose how your pension is structured. Some of these elections are permanent — once processed, TRS cannot change them. Understanding all four options before you sign the paperwork is worth the time.

Option 1: Standard Annuity

The Standard Annuity pays the maximum monthly pension for your lifetime. It's the default that most members choose.

It already includes built-in survivor coverage. Throughout your career, 1% of your gross earnings went to fund statutory survivor benefits. If you die after retirement, an eligible dependent beneficiary — spouse, civil union partner, minor child, or disabled adult child — receives a monthly survivor benefit. For a surviving spouse, that's generally 66.67% of your earned pension at death.

No extra election is needed for this coverage. It comes built into the Standard Annuity.

Option 2: Reversionary Annuity

The Reversionary Annuity lets you accept a permanently reduced monthly payment during your lifetime to provide an additional monthly annuity to a designated dependent after your death. This is on top of the built-in survivor benefit — it doesn't replace it.

The reduction amount depends on your age, the beneficiary's age, and the additional annuity amount you elect.

Two critical rules:

• Irrevocable. Once you select it on your retirement application and TRS processes the claim, you cannot switch back to the Standard Annuity. The reduction is permanent.
• Pop-up provision. If the designated beneficiary dies before you do, your pension restores to the full Standard Annuity amount starting the first of the month after TRS receives the certified death certificate. No retroactive adjustment for prior months.

The Reversionary Annuity makes the most sense when the built-in survivor benefit alone wouldn't adequately support the beneficiary. But many members elect it without realizing they already have statutory survivor coverage, unnecessarily reducing their own monthly income.

Option 3: Single-Sum Retirement Benefit

This option exists only for members with fewer than 5 years of service credit at age 65. Instead of a monthly pension, you receive a one-time lump-sum payment calculated at 1.67% of FAS per year of service.

If you have 5 or more years of service, this option isn't available. Most career educators never see it. It exists mainly for members who taught briefly in Illinois before moving to another career.

Accepting the single-sum benefit also disqualifies you from TRIP health insurance — a significant trade-off if you're under 65 and need coverage.

Option 4: Refund of Survivor Benefit Contributions

If you retire without an eligible dependent beneficiary — no spouse, no civil union partner, no minor or disabled child — you can request a refund of the 1% survivor contributions you paid throughout your career.

The refund equals 1% of all gross creditable earnings after July 24, 1959. For a 30-year career with average earnings of $60,000, that's roughly $18,000.

The trade-off is severe: accepting this refund permanently waives all future survivor benefit rights. If you marry after retirement, your new spouse would receive nothing from TRS upon your death. The only way to restore survivor coverage is to return to active TRS service and earn at least 1 additional year of creditable service.

Making the Decision

These options interact. Choosing the Reversionary Annuity while also considering the AAI buyout creates compound reductions in your monthly check. Choosing a survivor benefit refund while single and then getting married creates a permanent gap in coverage.

The TRS Illinois Retirement Guide includes a payout option comparison worksheet that maps each choice against your specific pension amount and family situation.

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